By Stephen Nellis
(Reuters) – Qualcomm on Wednesday forecast fiscal second-quarter revenue barely above Wall Avenue estimates and gross sales according to market expectations, as a brand new line of AI-enabled chips helps energy it out of final 12 months’s smartphone droop.
The gross sales outlook displays a ramp-up in purchases of recent Qualcomm chips with options designed to assist run chatbots, picture turbines and different artificial-intelligence options straight on a tool as an alternative of in cloud computing knowledge facilities.
Qualcomm predicted gross sales and adjusted revenue with a midpoint of $9.30 billion and $2.30 per share for the present fiscal second quarter ending in March. The outlook compares with analyst estimates of $9.30 billion and $2.25 per share, based on knowledge from LSEG.
Qualcomm shares rose as a lot as 5.2% in after-hours buying and selling.
Along with the outcomes, the corporate stated on Wednesday it has reached a chip provide cope with Samsung to provide chips globally for its top-end Galaxy S24 mannequin.
The features, coupled with Qualcomm’s muted inventory efficiency final 12 months throughout the smartphone droop, helped draw a greater response from traders than this week’s outcomes from Microsoft and Alphabet, whose shares each fell on Wednesday after their returns from AI to date have fallen shortof lofty expectations.
For Qualcomm, “5% income development and 24% earnings development may be very constructive in a skeptical earnings season surroundings,” stated Thomas J. Hayes of Nice Hill Capital.
Qualcomm is the most important provider of chips to a smartphone market that had its worst gross sales 12 months in a decade in 2023. Because the smartphone business slowly recovers, Qualcomm is going through competitors on a number of fronts, with Huawei and Samsung Electronics each promoting telephones powered by in-house chips and Taiwan’s MediaTek difficult Qualcomm’s stronghold in mid- and premium-tier Android telephones.
However the San Diego, California, firm final 12 months renewed a chip provide cope with Apple. It’s also increasing into different markets akin to private computer systems, with companions akin to Dell Applied sciences and Lenovo Group anticipated to debut laptops with chips that Qualcomm claims are quicker than Apple’s in-house processors.
For the fiscal first quarter ended on Dec. 24, Qualcomm reported gross sales and adjusted revenue of $9.94 billion and $2.75 per share, above estimates of $9.52 billion and $2.37 per share, based on LSEG knowledge.
In Qualcomm’s chip phase, the corporate forecast fiscal second-quarter gross sales with a midpoint of $7.9 billion, above analyst estimates of $7.86 billion. Qualcomm predicted second- quarter gross sales with a midpoint of $1.3 billion in its patent-licensing enterprise, according to estimates of $1.3 billion.
For the just-ended fiscal first quarter, Qualcomm stated chip and licensing revenues had been $8.42 billion and $1.46 billion, respectively, above/under analyst estimates of $7.99 billion and $1.41 billion, based on LSEG knowledge.
Inside its chip enterprise, Qualcomm stated that cellular handsets generated $6.69 billion in gross sales within the first quarter, above estimates of $6.37 billion, based on knowledge from Seen Alpha. Automotive and Web-of-Issues chip revenues within the first quarter had been $598 million and $1.14 billion, respectively, in contrast with analyst estimates of $518.3 million and $1.22 billion.
(Reporting by Stephen Nellis in San Francisco; Further reporting by Arsheeya Singh Bajwa in Bengaluru and Max A. Cherney in San Francisco; Enhancing by Sayantani Ghosh and Matthew Lewis)